Unfair but balanced commentary on tax and budget policy, contemporary U.S. politics and culture, and whatever else happens to come up

Thursday, December 24, 2015

Bush versus Trump tax plans

Now that the Tax
Policy Center has added an analysis of Donald Trump's tax plan to its earlier
analysis of Jeb Bush's plan, Kevin Drum offers the following snark:

"[Trump's
plan is] bigger, more energetic, and altogether more taxerrific than Jeb Bush's weak-tea excuse for a tax plan. Bush would increase the
national debt by 28 percentage points over the next decade. Trump kills it with
a 39 point increase in red ink. Bush raises the federal deficit by $1 trillion
in 2026. Trump goes big and increases it by $1.6 trillion. Bush's plan costs
$6.8 trillion over ten years. Trump's plan clocks in at a budget-busting $9.5
trillion. And Bush reduces the tax rate of the super-rich by a meager 7.6
percent. Trump buries him by slashing tax rates for the Wall Street set by 12.5
percent."

I realize this is a "glass half-full versus half-empty" type of a thing, but I see an angle to this that's opposite to the one Drum emphasizes. He notes: "Once again, Bush has brought a knife to a gun fight, and Trump has slapped him silly" - fair enough as campaign commentary, leaving aside the point that these tax plans are mainly for the donors and D.C. conservative leadership types, not the Republican voters, and that those target groups are nonetheless still anti-Trump.

I see the opposite point, which is that all of the Republican candidates are very similar to Trump - it's just a matter of degree. E.g., in all the above measures, Trump has merely taken insane features of the Bush tax plan and given them a roughly 50 percent boost. This still leaves Bush's substantive tax proposals about 2/3 as insane as Trump's.

I say "insane" because the plans are so fiscally reckless. They're not going to get the budget cuts or growth boosts that would cause them merely to express a different fiscal philosophy than the one I happen to prefer. The effects on the super-rich admittedly require a separate and longer conversation.

In sum, to recompute the metaphor above in light of the actual numerical ratios from the TPC studies, Bush's glass of tax crazy is either 2/3 full or 1/3 empty, if we use Trump as the benchmark for a full "glass." It's not just half-full versus half-empty.

I'm disappointed that "responsible" people on the seemingly adult right, like Martin Feldstein and Glenn Hubbard, either actually want to do the sorts of things Bush advocates, or feel bound to act as if they do. Under present circumstances, and if the Republicans win the White House in 2016, it really doesn't matter which.

About Me

I am the Wayne Perry Professor of Taxation at New York University Law School. My research mainly emphasizes tax policy, government transfers, budgetary measures, social insurance, and entitlements reform. My most recent books are (1) Decoding the U.S. Corporate Tax (2009) and (2) Taxes, Spending, and the U.S. Government's March Toward Bankruptcy (2006). My other books include Do Deficits Matter? (1997), When Rules Change: An Economic and Political Analysis of Transition Relief and Retroactivity (2000), Making Sense of Social Security Reform (2000), Who Should Pay for Medicare? (2004), Taxes, Spending, and the U.S. Government's March Towards Bankruptcy (2006), Decoding the U.S. Corporate Tax (2009), and Fixing the U.S. International Tax Rules (forthcoming). I am also the author of a novel, Getting It. I am married with two children (boys aged 24 and 21) as well as three cats. For my wife Pat's quilting blog, see Patwig’s Blog.